ACCT 386 - Week 6 - Homework - Question 5

ACCT 386 - Week 6 - Homework - Question 5

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Question 5

Dresser Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company’s budget for the current year:

Denominator activity (direct labor-hours)

13,000

Variable manufacturing overhead cost at 13,000 direct labor-hours

$

49,400

Fixed manufacturing overhead cost

$

143,000

The standard cost card for the company’s only product is given below:

Direct materials, 2 pounds at $3.20 per pound

$

6.40

Direct labor, 2 direct labor-hours at $12.00 per direct labor-hour

24.00

Overhead, 123.33% of direct labor cost

29.60

Standard cost per unit

$

60.00

During the year, the company produced 5,300 units of product and incurred the following costs: